China is very interested in Canada's vast oil resources. So interested, in fact, that it's not only buying a major Canadian oil company with large holdings in the Alberta tar sands, it's also inked a trade deal that will, in effect, blunt any efforts to restrict massive exploitation of that dirty fuel for decades to come.
If you're a Canadian, you have a lot of reasons to be unhappy about all this. And given the impact that all this will have on the planet's increasingly unstable climate, everyone else has a big stake in this, too. But there's good reason to think this is far from a done deal.
Givin' it all away
China's rapid growth is fuelling a massive drive to acquire control of natural resources, especially oil. With Canada controlling the second-largest known petroleum reserves in the world, China definitely wants a piece of that action. And Conservative prime minister Stephen Harper, a big booster of exploiting Alberta's tar sands, is eager to give it to them. So, the Harper government has signed a trade treaty with China that seems designed to make sure that the Chinese get the oil and Canadian citizens have next to no say about it.
This has taken the shape of the Canada-China Foreign Investment Promotion and Protection Act (FIPPA), which basically says that if any Canadian government – federal, provincial or local – passes laws or regulations that decrease the value of Chinese investments, those companies can sue for damages. Not in an actual Canadian court, of course. No, these complaints will be heard in closed-door hearings before panels of private arbitrators. And if those arbitrators decide the companies have been harmed, they can hand out huge monetary judgments.
Technically, Canadian officials aren't actually prohibited from taking actions to protect their constituents' health, safety or the environment. They'd just have to pay through the nose if those decisions cost these companies any money. And this is no idle speculation. Belgium is right now being sued by China for $2bn under a similar treaty there.
As you might imagine, a lot of people are unhappy about this loss of sovereignty and democratic decision making. Tom Mulcair, leader of the New Democrat party, says FIPPA will turn Canada into a "resource colony," and pledges to back out of the treaty if his party is elected in 2015. Citizen groups are fighting back against the anti-democratic impact of the deal, and people in the Pacific province of British Columbia are opposing the pact because it will grease the skids for oil pipelines that could devastate their coastal waterways. There are also serious questions about FIPPA's constitutionality but the Harper government is pushing it through quickly and with little discussion, and evidently hopes the ruckus will eventually die down.
At the same time, Harper's Tories are also moving towards approving the $15.1bn sale of Nexen, one of Canada's biggest oil companies with substantial holdings in the Alberta tar sand fields, to the state-owned China National Offshore Oil Corporation. This isn't the first sale of Canadian oil interests to Chinese firms, but it's the biggest so far, and raises questions about what kind of influence China will be able to have on Canadian decision making.
For instance, Alberta's tar sands are a long way from the ports where oil gets shipped. That means you need pipelines, and big ones, to get this stuff to market. Right now, the Keystone XL pipeline, proposed to bring tar sands crude oil south, across the middle of the US, to refineries and shipping facilities on the Gulf of Mexico coast, is stalled by vigorous opposition that led President Barack Obama to reject it, at least in its present form. The Northern Gateway pipeline project, which would pipe the black goo from Alberta across British Columbia to the Pacific Ocean, is also faltering, as the provincial government has been forced by strong public opposition to push back against it.
Here's the rub
This is where FIPPA comes back into the picture. The treaty is slated to go into effect any day now. Once it does, the public can be held liable for losses suffered by, say, a Chinese state oil company that lost money on its investment in Canadian tar sands because citizens didn't want crude oil spilling in their water. With that threat held over officials' heads, it's much less likely they'll do the right thing.
It's very important that the tar sands do not become the global energy source the Harper gang wants them to be. Digging up tar sands is more like mining for oil than drilling for it. The thick, tarry “bitumen” is scooped up by massive machines and the sand, clay, trees, etc, on top of it has to be washed away. Vast amounts of hot water and chemical solvents are needed. The extraction process requires moving four tons of earth to produce a single barrel of oil, and the toxic waste tailings are kept in storage ponds that are big enough to be seen from space. Aside from the immense damage this does to the land in Alberta, the oil made this way is even dirtier than conventional oil. Tapping that resource – at exactly the time we desperately need to be moving away from the carbon-based fuels that are rapidly warming the planet – is a disastrous mistake that everyone on earth will pay for. As leading climate scientist James Hansen has said, it would be "game over" for the climate.
It's not too late
The Harper government has done its best to make FIPPA a done deal. But it isn't. If concerned citizens can mobilise to show Ottawa that we won't accept this unfair, anti-democratic giveaway of Canada's sovereignty and its resources, the Harper government could still be forced to back down.
Read more: Canadian journalist Andrew Nikiforuk details the many ways the Tory government is betraying its people and the planet.
Sources: Wall Street Journal, WorldWatch, Vancouver Observer, Star, Globe and Mail, Huffington Post, Lead Now, Pacific Free Press, DeSmogBlog, Al Jazeera, Macleans, BBC, Avaaz, Sierra Club, US Bureau of Land Management, Natural Resources Defense Council, New York Times, Tyee